Federal police officers check the blood stains on the sidewalk where two people were shot dead with high-powered weapons in Guadalupe, Mexico, Jan. 6, 2010. Erika Gandara, 28, was the last remaining police officer in the town before a group of armed men took her away, residents say, and she has not been seen since. Guadalupe is one of the many cotton towns south of Juarez that sits in territory disputed by at least two major drug trafficking groups, leading to deadly power struggles. (Adriana Zehbrauskas/The New York Times)

Charles Bowden is an author and journalist whose work has largely focused on the US/Mexico Border region. His writing has especially centered on the Mexican drug war and Ciudad Juárez, the border city known as the epicenter of Mexican drug violence. His critically acclaimed book, "Murder City: Ciudad Juárez and the Global Economy's New Killing Fields," was published in 2010 by Nation Books. His latest work, edited along with Molly Molloy, is "El Sicario: The Autobiography of a Mexican Assassin" and was just released, also by Nation Books.

Bowden sat down for a video interview with me while in San Francisco for a speaking engagement. In his responses he argues the extreme violence seen in Mexico is a sign of a deeper societal disintegration resulting from governmental corruption, failed economic policies and the war on drugs. What follows is an edited transcript of our conversation. To view an 11-minute edited selection of the video click here.

David Zlutnick: Would you please start by explaining the North American Free Trade Agreement (NAFTA) and its effects on Mexico and perhaps the impact of US and Mexican policy more generally over the past couple decades?

Charles Bowden: Or the past couple centuries. Yeah, Mexico's a product of 500 years of corruption. But it's also a product of American intervention. In 1846 we stole a third to half the country in the [Mexican-American] War, which we started unilaterally. We have dominated its economic policy. By the time of the 1910 Revolution, 20 percent of the country was owned by foreigners, you know? We've constantly intervened in its affairs and now the war on drugs is destroying it.

NAFTA, our free trade agreement, instead of revitalizing Mexico destroyed peasant agriculture and light and intermediate industry, unleashing - in my opinion and in the opinion of others - one of the largest migrations in the world today. Look, the North American Free Trade Agreement opened Mexico inevitably to agricultural products from the United States. Agribusiness destroyed peasant agriculture. When the treaty was passed you could buy a ton of corn in the United States, I think, for $100. It cost $200 a ton in Mexico. So instantly peasant agriculture and corn was wiped out. Washington State tomatoes destroyed the tomato orchards. They can't compete with our dairy products. They can't compete with our hog farms and on and on. Now some of this was seen coming. Tom Barry wrote an excellent book on it before the treaty passed, saying it would be an agricultural holocaust, which it was.

The idea was it would create other jobs for these people in industry. Well, it did and it didn't. Like there are now 400 maquiladoras - border factories - in Juarez. But they pay a wage that no one - cannot sustain a human being. Down there you make about 65 bucks a week in a maquiladora, say, in Juarez. But the cost of living on the border in Mexico is 80-90 percent of what it would be if you lived in the United States. And no one seriously thinks an American can sustain himself on $65 a week, you know, unless he's a 14 year old living at home. So the thing doesn't work. Nobody will admit it doesn't work and I'll tell you why: Because free trade isn't an economic policy really, it's a theology. It's impervious to any facts. It's never a question, empirically, "Does this work or doesn't this work?" People just - It's just believed in. It's an act of faith. Well, I don't share the faith. If you put 400 factories in Juarez and the city prospered, I'd be in favor of what happened. But here's what happened: You go to the Midwest and other places, you see the absolute destruction of blue-collar jobs in this country and you see those same jobs appear in Juarez and destroy Mexican families because of slave wages. The rule of thumb, roughly, is what a factory, say, in Ohio paid somebody an hour, is what the same factory will pay a Mexican a day. So it's a double-destruction. And I've done stories on that, I've been to the factories in Ohio that are closed. A lot of them went to China, which is the problem Mexico faces. If it raises its wages it loses its jobs to China because Mexico's wages are four times China's wages. It's a doubling down, a race to the bottom. Look, the global economy now, in essence operates this way: labor's trapped and capital moves.

A lot of your work has focused on the economic situation in Mexico and connecting that to the drug war. How do you see economic policy having contributed to the outbreak of the violence we're now seeing in Mexico?

There's no simple explanation of the violence in Mexico today. But there are multiple - There is a background to the violence, I'll put it that way. The North American Free Trade Agreement drew people to the border from a collapsing interior in Mexico. Places like Juarez and all the border cities boomed with huge population growth. Now we're into two or three generations, because free trade - the earliest phases of it, at least, really start in the '60s on the border with the border-plant concept. What we've gotten are steadily declining wages in real pesos, purchasing power; two to three generations of kids raised in poverty with absent parents working in the factory; and overlaying on this, the explosion of the drug industry.

What changed the drug industry in Mexico and made it gigantic was when the United States shut down the Florida corridor for cocaine from Columbia in the early '80s. It then shifted through Mexico. Mexico became, in certain terms, the "trampoline." [Referring to "The Trampoline" drug route, where cocaine was moved from Columbia to Mexico, then "bounced" up to the US.] The Mexican drug organizations soon shoved out the Columbians, basically. They started out being delivery boys for the Columbians and wound up the tail wagging the dog. This led to a gigantic growth of illicit money in Mexico. No one is really clear today on how much of the Mexican economy is based on criminal enterprise, but it's huge. And the reason it's huge is the drug industry is earning, according to our agencies, $30-50 billion a year. And frankly there's no way to get rid of that just on pretty women and hot cars and discotecs. The only place you can get rid of the money is the legitimate economy, by buying it. Now this has been going for year after year after year. So year after year after year the presence of the money in the economy grows. It aggregates. The same thing's happened in Italy. If you have a cup of coffee with an intelligent Italian, the argument will be about whether 40 percent of their economy is mafia or 60 percent - not whether a lot of their economy is mafia. The same thing is happening in Mexico - or has happened. It is the economy now. That's why the war on drugs in Mexican terms is preposterous. To ask Mexico to get out of the drug business is essentially asking it to drop dead. That's its source of money.

And the three largest contributors to the Mexican economy are oil revenue, remittances from migrant workers in the United States and drug money. You've argued before - and just mentioned again - that it would be economic suicide for the Mexican state to actually destroy the drug trade. Would you outline your understanding of the Mexican economy and how that relates to the drug war?

We have to be careful when you say the word "economy." Fifty percent of the Mexican population lives outside the economy in utter poverty. Well, they have an economy, but when you live outside the economy it means the bankers and the boys on Main Street don't get any of it. Because you're out there living under a tree somewhere not buying things. What the - what we're talking about is the access to foreign currency. And the three licit forms [in which] Mexico has traditionally gotten foreign currency is oil, remittances and tourism. Drugs dwarf all of them. Drugs have gotten bigger than all of those things. It is the largest source of foreign money.

NAFTA is an illusion. You know, there's something most people don't understand: These border plants operate by having all the parts shipped in, having the object assembled - let's say a vacuum cleaner - then the vacuum cleaner is shipped out. So, the only contribution the Mexicans made is labor. The labor's slave wages, so Mexico gets almost nothing out of it. They fake the statistics by saying, "Oh, look, we have these huge exports," and they count the value of the vacuum cleaner. Well, that's a myth. All they've contributed is this tiny, little thing called labor and the people get paid almost nothing. And that's one reason it doesn't work. Good god, if you had a hundred thousand good factory jobs in Juarez, a city of a million, paying real wages it would definitely be a boon to the city. But in fact you have a hundred thousand jobs, let's say, paying slave wages where nobody working in the factory five and a half days a week can even live on the wages, meaning they have to live together three or four to a hut just to survive.

On top of the fact that industry isn't providing, Mexican oil fields are in decline and at some point will run dry. So, what's the Mexican government to do? Because if they actually get rid of the drug industry, it seems a huge provider of foreign currency would be gotten rid of, too.

Well, look, if you shut down the drug industry in Mexico you'd get almost a rigor mortis. I mean, this is the lubricant. And it's not just Mexico. There are serious articles you can find that during the global financial collapse of 2008 what kept the global banks going was drug money. And the reason the drug money mattered is it's all cash. It was the only liquid source left as the system globally was collapsing. So, there's serious studies that think it was the essential lubricant to keep the system of banking - international banking - staggering along.

Now the fact is nobody knows the scale of the drug industry. And nobody ever will because there's no accurate accounting systems of it. We just know it's big and getting bigger. One of the fantasies is, almost every year, the United States government releases a study saying that drug consumption's going down in the US, but every year the budget to fight drugs increases. Every year, the size of the seizures increases. So, you have to ask yourself, "Why are the Mexicans smuggling heroin, cocaine and marijuana into the United States - and methamphetamines - if increasingly nobody uses it here?" Well, the answer is the government's lied. They're not doing this for aerobic exercise, the drugs are being brought into the United States just like any other product - because people here buy them. One of the fallacies - you know, the idiocies of the war on drugs, is that there's never been a successful government measure that can repeal the market economy. You know, that's why prohibition failed.

Regarding the decision to deploy the Mexican army against the cartels, you once said: "[President Felipe Calderón] ripped the mask off Mexico ... And the mask he ripped off revealed what's really going on in Mexico: mass poverty and social disintegration. Now it's turned into a war by the Mexican government against the Mexican people." Why should the government's actions be perceived as a war against its own people?

Well, I'll tell you why: Because Mexico is an Indian nation that's traditionally been ruled by Europeans. The presidents of Mexico tend to look like Germans and the voters tend to look like a mahogany table. And the elites there always resented this, always wished they didn't have an Indian nation to rule. And this has been going on a long time. Porfirio Díaz tried to slaughter all the Indians, for example, during his 30-ear dictatorship, even though he was an Indian. So, it is not odd at all for a president of Mexico to attack his own population.

Now Calderón is a very devout Catholic and he believes deeply in free trade. He belongs to a party there that would be like the Republican Party here. So, he thinks he's giving shock therapy essentially to his own nation. One. Two: I don't think he had any idea really what he was getting into. He thought he'd prove he was a powerful strongman, and the country exploded because he didn't know his own country. What I mean when I say "ripped the mask off" is that he had assumptions about Mexico that were not true. And now the real Mexico's there - a country full of poor people with a corrupt government and there's - in a way a lot of the violence is like a mass revolt in the country. It's not political; it's simply, look, there's not a future for a lot of people; there's no money; there's no jobs. And now they're just killing each other and robbing. That's a lot of the crime - it has nothing to do with cartels fighting [each other] ...

Calderón put the Army on the street and you've been a strong critic of this. Why are you opposed to the deployment of the military? And do you think if Calderón disengaged the military it would have a significant positive effect?

Let's take the first part of the question. I'm critical of using the military because it's always been corrupt and doesn't know how to police anyway - armies only know how to destroy targets. The Mexican military has always been in the drug business. It's just a bunch of nonsense to say they're not corrupt. In the early '80s, Rancho Buffalo, which was a huge marijuana plantation, had 10,000 campesinos as field hands and it was run by the Mexican Army. The generals were there all the time. So the premise that they're not corrupt is idiocy.

The second thing - what has happened now with 40,000 dead Mexicans, with 17 states at least in Mexico out of 30 full of extreme violence, is you can't unring the bell. If the Mexican Army goes back to its barracks, this violence will continue. Good God, you can't produce 8,000 slaughtered people in one city like Juarez and not have a bunch of people permanently damaged just because they become killing machines. You know, this thing has gotten too big. You can't stop it now easily. What the Army is doing is realizing this failure. The Army is trying to get a lot of the duties turned over to the federal police because they don't want to do it anymore. Because it isn't working; it's a disaster and armies are always about protecting themselves, you know.

But Mexico's gone down a path now that cannot easily be changed. Calderón's administration will end in a year, in 2012. The next president is going to inherit a mess. And if he sends the Army back to the barracks and announces a new policy, I don't think it will end the violence. There are too many people in the country now living as outlaws. We know this from our own experience. When we ended prohibition in '33, it didn't end - the gangsters didn't say, "Ah, hell, I can't be a bootlegger anymore, I guess I'll go get a job at JC Penny's." They remained criminals. And basically, part of the '30s was exterminating a national criminal class created by prohibition. The same thing's going to happen in Mexico.

The United States has financed much of the Mexican state's involvement in the drug war through the Mérida Initiative. Could you explain how this plan works and outline US involvement with the Mexican military and law enforcement?

Well, the Mérida plan doesn't work. It was an initiative started under President Bush to say, "Well, if you help us in the drug war, we'll give you half a billion a year," which we are. Actually, the Mérida plan is increasing and now the US government has just announced out of good heart we're going to expand it and give 300 million a year to murderous regimes in Central America to fight drugs. But the problem is, we're arming a bunch of entities in these countries that slaughter people; it's not going to affect the drug business, because the drug business is where the money is. This is a fantasy to sell [to] the American voter, that we're dealing with the problem. The people in favor of this policy know it isn't true and functionally they're liars. Hillary Clinton and these people are just lying, because Hillary Clinton is a highly intelligent person. She knows better than this. She just knows it's politically palatable.

Look, there's just no solution to what we call the "drug problem." Our policies are at best idiotic. Americans want to consume drugs; nobody's going to stop them. So, any effort to continue this policy to solve what we call a "drug problem" - drug consumption - through making it criminal, will fail. It's failed for 40 years. We're 40 years into this official war; we've spent a trillion dollars and drugs are more available than when we started and they're, in real dollars, cheaper. Yeah, so, there's no defense of this policy ...

You make the case that not only much of Mexico's economy, but also much of the US economy is rooted in the drug war through the prison industry, countless thousands of jobs in law enforcement fighting drugs etc.

Here's the deal: It's not that the war on drugs is essential to the economy; it's that it's a vested part of our culture now. It has a constituency; it lobbies; it has a life of its own. If you come out, as I do, for legalization [of drugs], there are billions of dollars readied against you. When George Soros bankrolled medical marijuana, the initiative in California, the largest single source of money to fight that initiative was the prison guards' union here. That's where, I guess, where it's part of the economy. Most Americans - what's changed since I've covered this is, 30 years ago, people tended to see drugs as something that was used by lower-class people who were losers, that didn't have a lot to do with their life. Now, there's hardly a family in this country that hasn't had a member in it damaged by this war on drugs, that hasn't had a member of their family that's an addict and suddenly is treated as a criminal. I do talk radio shows fairly frequently all over this country and I never bring up legalization. Invariably, a caller does and they always do it for a personal reason. Their uncle, their cousin, their sister, their brother, you know, has a problem with drugs and they think it should be treated as a health issue, not a criminal issue, because it's no longer the darkness at the edge of town ...

As you've mentioned, remittances from Mexican workers living in the US is one of the greatest sources of income for Mexico. You've previously expressed the view that, given the state of Mexico's economy, it's therefore in the government's best interest to encourage emigration to the US - that a Mexican is in many ways a liability to the state if they stay, but a source of financial revenue if they leave.

Look, what we call "illegal immigration" is actually a policy favored by the Mexican government to exile its own citizens. Fifty percent of the Mexican population lives outside the economy in real poverty - deep poverty. You take one of those people, let's say an Indian from Oaxaca; he illegally goes north; he makes it to Chicago; he's washing dishes. You suddenly transferred a person, as if by magic, from somebody who can't even sustain himself in Mexico to somebody who's sending home to Mexico hundreds of dollars a month. He turns into a human ATM. Well, this has happened to millions of people as they've left Mexico. I believe the most successful anti-poverty initiative in the history of the world is the migration of the Mexican poor north. We've probably taken ten or fifteen million people and turned them into little bankrolls sending money home. They're sending home over 20 billion a year; they're sustaining huge numbers of people in Mexico and all that had to be done to achieve this miracle is let them go through a wire and take a menial job in the United States.

So, in your opinion, the Mexican "emigration" policy, I guess, and the US immigration policy, where do those collide and where do they complement each other?

They don't collide. Look, the Mexican policy is that "Mexicans have a right to move freely." What's real policy is, "Let's get rid of these worthless people that are taking up space here and then they go to the United States and they send money home." The US policy is, "Oh, this is terrible." When, in fact, we have sectors of our economy dependent on these people ...

One of the arguments I like to make, too, especially to progressive people, is that the most successful NGO in Mexico is the drug business. It employs more people; it pays higher wages; it doesn't discriminate. It's one of the few places in the country that's on a merit system. Now, you know, that's why it's run by cutthroats from poor families, in general. Mexico has a caste system, but in the drug world, it's all on how well you do your job. And so, you can kill your way to success. It's the most successful nongovernmental organization in the history of the country. All the other NGOs are just little trifles in comparison. And that's why nobody can compete with the drug industry. I don't care how many people get killed moving drugs; there's a line to get the job.

I'm not sure if you've seen it, but British journalist Ed Vulliamy -

He's a friend of mine.

He's a friend of yours?

I know him, yeah. Look, there's only about seven people that give a damn about the border ...

He wrote an article on Juarez last week for The Guardian. He actually quoted you. But he said: "The thing that really makes Mexico's war a different war and of our time, is that it is about, in the end, nothing." He describes it as an "inevitable war of capitalism gone mad." Basically, he laments that the mass violence is purely market forces gone wrong and without rational cause, possessing neither ideology nor honor and fought for the latest T-shirt brand. What is your view on this?

Well, look, I know Ed ... We've had this argument for years. Ed comes from a sort of left perspective and he wants to see a sort of political meaning in things. And when I first met him, I told him that's where I disagreed with him, that there is no political meaning, in the sense he's thinking of, in the violence in Mexico today. There are no manifestos. These are not proto-insurgencies, like Mrs. Clinton alludes. This is simply about survival. It's about money and power. It doesn't have a politics.

But I think that's what he's arguing. He's saying -

No - he is now, yes. Look, I like to argue. And Ed's a very good reporter. And he would like to have this - there's some beginning of the Mexican Revolution in this, but there isn't. It's apolitical horror. It's just killing. And now, we have thousands and thousands and thousands of people inured to violence. Now, we have countless people damaged. Now, I have a friend, Pastor Jose Antonio Galván, who's a street minister in Juarez and he deals with the damaged. And he believes - and I think he's right - that for every killing there's 30 or 40 people damaged mentally by the murder. Because these are murders. This is not I go out across the street and get hit by a car. People get sad then, but they can - it's explicable. This is your wife gets in the car to go to the grocery and gets machine-gunned two blocks away and you have no idea why and you never find out who did it. That's what's happening. There's been at least three instances in the last couple months that I can recall of police finding little toddlers wandering the streets and then they finally figure out who they are and they go to the house and the parents have been slaughtered. The kids have just wandered off, you know, little tiny children.

In much of you're writing, the scale of the Mexican migration has been put into the larger context of a greater migration: the international mass movement of the poor toward concentrations of global wealth. Can you expand on this larger idea and where you see Mexico fitting in?

Yeah. Americans are obsessed with the illegal Mexican migration, because it's the only real taste they get of the actual goddamn world. The world is full of people moving now because of collapsing economies and growing populations. If you go to Europe, there's a flotilla now of ships across the Mediterranean to stop people from trying to get in ... This is happening all over the world. Our assumptions about a global economy and how it'll hum along - this sort of, let's say, Clintonian wet dream - are proven false. It isn't working out that way. China has at least 200 million dislocated people as it's tried to industrialize like the West. And so, we're going to have to live with this ... And I think, in that sense, the stresses will increase.

Our solution is infantile. We've built this actual physical wall. Years ago and I still am, a deep fan of Garret Hardin. Garret Hardin was a kind of philosopher and he wrote two key essays - "The Tragedy of the Commons," [and] he also wrote one called "Lifeboat Ethics" - saying we were headed toward barbarism - he wrote this in the 1970s - that as resources decline, population increased, we would get a lifeboat situation with people swimming to your lifeboat and you wouldn't let them in, because if you do, the whole boat sinks. In other words, we'd have to make terribly harsh decisions. Well, I think even that's out of date now, because there's no lifeboat ethics with global warming etc. There is no lifeboat. We're all trapped together now - that no matter what I do or anyone else does, that if China wants to keep increasing its carbon footprint, we're going to have planetary disaster. And you can't build a wall against that. Really. We're living in the past with those concepts.

What we haven't got yet, is a political class on the planet that can sell the idea of global catastrophe. We're still pretending we can wall it off, you know ... Let me make this clear: it doesn't matter if you like Mexicans or dislike Mexicans. It doesn't matter if you want them to stay in their country or want them to come here. They're not going to stay in their country. They're not going to stay there and die. There's going to be 150 million of them in 30, 40 years. The country can't sustain its current population of 110 million, so they are going to move. I don't get to decide that. I just have to live with that reality. Europe is going to be under siege. The rich nations of the world are going to be under siege, because people will try to escape into them to save their own lives.

At least in the Mexican instance, what do you believe should be done? What are the steps that need to be taken to, at the very least, restore some normalcy to the lives of those in Mexico?

Mexicans have to fix Mexico. Americans can't. But what Americans can do is stop policies that damage Mexico and make everything worse. Renegotiate NAFTA so it pays a living wage. Face the fact that we're going to have Mexican workers here and legalize them either as temporary workers or as people eligible for citizenship. We cannot run a country with a secret underclass. We cannot run a country where there's two types of human beings. We did it once; it caused a civil war, killed 600,000 people and set back an entire region of our country - the South - for a century. Finally, end the war on drugs. There's no solution, for Mexico or the United States, by giving tens of billions of dollars a year to a criminal class. We can't stop people from using drugs. We let them have drugs and make it a medical issue. You know, just as we have with smoking, alcohol etc.

You know, we can live with drugs. We already are, they're everywhere anyway. One of the preposterous claims people make is, "Well, Chuck, if you legalize drugs they'll be in the schools." Well, Jesus, go down to the schoolyard, I mean they've been there for decades and everybody knows it. What we don't want is an unregulated use of them. And we don't want people dying from overdoses because of toxicity and bad drugs. I would like to live in a world where there are no guns and everybody lived on organic vegetables, I guess, but I don't get that choice. I get a choice of this world and, in this world, making drugs criminal has been a disaster. And any intelligent person when they see something doesn't work tries something else. Nobody throws sand in their gas tank, has the engine stop and says, "Well, I'll just keep throwing sand in." Well, that's what we're doing. You have to be on drugs to be in favor of the war on drugs. You can't be clean and actually think it's working.

Federal police officers check the blood stains on the sidewalk where two people were shot dead with high-powered weapons in Guadalupe, Mexico, Jan. 6, 2010. Erika Gandara, 28, was the last remaining police officer in the town before a group of armed men took her away, residents say, and she has not been seen since. Guadalupe is one of the many cotton towns south of Juarez that sits in territory disputed by at least two major drug trafficking groups, leading to deadly power struggles. (Adriana Zehbrauskas/The New York Times)

Charles Bowden is an author and journalist whose work has largely focused on the US/Mexico Border region. His writing has especially centered on the Mexican drug war and Ciudad Juárez, the border city known as the epicenter of Mexican drug violence. His critically acclaimed book, "Murder City: Ciudad Juárez and the Global Economy's New Killing Fields," was published in 2010 by Nation Books. His latest work, edited along with Molly Molloy, is "El Sicario: The Autobiography of a Mexican Assassin" and was just released, also by Nation Books.

Bowden sat down for a video interview with me while in San Francisco for a speaking engagement. In his responses he argues the extreme violence seen in Mexico is a sign of a deeper societal disintegration resulting from governmental corruption, failed economic policies and the war on drugs. What follows is an edited transcript of our conversation. To view an 11-minute edited selection of the video click here.

David Zlutnick: Would you please start by explaining the North American Free Trade Agreement (NAFTA) and its effects on Mexico and perhaps the impact of US and Mexican policy more generally over the past couple decades?

Charles Bowden: Or the past couple centuries. Yeah, Mexico's a product of 500 years of corruption. But it's also a product of American intervention. In 1846 we stole a third to half the country in the [Mexican-American] War, which we started unilaterally. We have dominated its economic policy. By the time of the 1910 Revolution, 20 percent of the country was owned by foreigners, you know? We've constantly intervened in its affairs and now the war on drugs is destroying it.

NAFTA, our free trade agreement, instead of revitalizing Mexico destroyed peasant agriculture and light and intermediate industry, unleashing - in my opinion and in the opinion of others - one of the largest migrations in the world today. Look, the North American Free Trade Agreement opened Mexico inevitably to agricultural products from the United States. Agribusiness destroyed peasant agriculture. When the treaty was passed you could buy a ton of corn in the United States, I think, for $100. It cost $200 a ton in Mexico. So instantly peasant agriculture and corn was wiped out. Washington State tomatoes destroyed the tomato orchards. They can't compete with our dairy products. They can't compete with our hog farms and on and on. Now some of this was seen coming. Tom Barry wrote an excellent book on it before the treaty passed, saying it would be an agricultural holocaust, which it was.

The idea was it would create other jobs for these people in industry. Well, it did and it didn't. Like there are now 400 maquiladoras - border factories - in Juarez. But they pay a wage that no one - cannot sustain a human being. Down there you make about 65 bucks a week in a maquiladora, say, in Juarez. But the cost of living on the border in Mexico is 80-90 percent of what it would be if you lived in the United States. And no one seriously thinks an American can sustain himself on $65 a week, you know, unless he's a 14 year old living at home. So the thing doesn't work. Nobody will admit it doesn't work and I'll tell you why: Because free trade isn't an economic policy really, it's a theology. It's impervious to any facts. It's never a question, empirically, "Does this work or doesn't this work?" People just - It's just believed in. It's an act of faith. Well, I don't share the faith. If you put 400 factories in Juarez and the city prospered, I'd be in favor of what happened. But here's what happened: You go to the Midwest and other places, you see the absolute destruction of blue-collar jobs in this country and you see those same jobs appear in Juarez and destroy Mexican families because of slave wages. The rule of thumb, roughly, is what a factory, say, in Ohio paid somebody an hour, is what the same factory will pay a Mexican a day. So it's a double-destruction. And I've done stories on that, I've been to the factories in Ohio that are closed. A lot of them went to China, which is the problem Mexico faces. If it raises its wages it loses its jobs to China because Mexico's wages are four times China's wages. It's a doubling down, a race to the bottom. Look, the global economy now, in essence operates this way: labor's trapped and capital moves.

A lot of your work has focused on the economic situation in Mexico and connecting that to the drug war. How do you see economic policy having contributed to the outbreak of the violence we're now seeing in Mexico?

There's no simple explanation of the violence in Mexico today. But there are multiple - There is a background to the violence, I'll put it that way. The North American Free Trade Agreement drew people to the border from a collapsing interior in Mexico. Places like Juarez and all the border cities boomed with huge population growth. Now we're into two or three generations, because free trade - the earliest phases of it, at least, really start in the '60s on the border with the border-plant concept. What we've gotten are steadily declining wages in real pesos, purchasing power; two to three generations of kids raised in poverty with absent parents working in the factory; and overlaying on this, the explosion of the drug industry.

What changed the drug industry in Mexico and made it gigantic was when the United States shut down the Florida corridor for cocaine from Columbia in the early '80s. It then shifted through Mexico. Mexico became, in certain terms, the "trampoline." [Referring to "The Trampoline" drug route, where cocaine was moved from Columbia to Mexico, then "bounced" up to the US.] The Mexican drug organizations soon shoved out the Columbians, basically. They started out being delivery boys for the Columbians and wound up the tail wagging the dog. This led to a gigantic growth of illicit money in Mexico. No one is really clear today on how much of the Mexican economy is based on criminal enterprise, but it's huge. And the reason it's huge is the drug industry is earning, according to our agencies, $30-50 billion a year. And frankly there's no way to get rid of that just on pretty women and hot cars and discotecs. The only place you can get rid of the money is the legitimate economy, by buying it. Now this has been going for year after year after year. So year after year after year the presence of the money in the economy grows. It aggregates. The same thing's happened in Italy. If you have a cup of coffee with an intelligent Italian, the argument will be about whether 40 percent of their economy is mafia or 60 percent - not whether a lot of their economy is mafia. The same thing is happening in Mexico - or has happened. It is the economy now. That's why the war on drugs in Mexican terms is preposterous. To ask Mexico to get out of the drug business is essentially asking it to drop dead. That's its source of money.

And the three largest contributors to the Mexican economy are oil revenue, remittances from migrant workers in the United States and drug money. You've argued before - and just mentioned again - that it would be economic suicide for the Mexican state to actually destroy the drug trade. Would you outline your understanding of the Mexican economy and how that relates to the drug war?

We have to be careful when you say the word "economy." Fifty percent of the Mexican population lives outside the economy in utter poverty. Well, they have an economy, but when you live outside the economy it means the bankers and the boys on Main Street don't get any of it. Because you're out there living under a tree somewhere not buying things. What the - what we're talking about is the access to foreign currency. And the three licit forms [in which] Mexico has traditionally gotten foreign currency is oil, remittances and tourism. Drugs dwarf all of them. Drugs have gotten bigger than all of those things. It is the largest source of foreign money.

NAFTA is an illusion. You know, there's something most people don't understand: These border plants operate by having all the parts shipped in, having the object assembled - let's say a vacuum cleaner - then the vacuum cleaner is shipped out. So, the only contribution the Mexicans made is labor. The labor's slave wages, so Mexico gets almost nothing out of it. They fake the statistics by saying, "Oh, look, we have these huge exports," and they count the value of the vacuum cleaner. Well, that's a myth. All they've contributed is this tiny, little thing called labor and the people get paid almost nothing. And that's one reason it doesn't work. Good god, if you had a hundred thousand good factory jobs in Juarez, a city of a million, paying real wages it would definitely be a boon to the city. But in fact you have a hundred thousand jobs, let's say, paying slave wages where nobody working in the factory five and a half days a week can even live on the wages, meaning they have to live together three or four to a hut just to survive.

On top of the fact that industry isn't providing, Mexican oil fields are in decline and at some point will run dry. So, what's the Mexican government to do? Because if they actually get rid of the drug industry, it seems a huge provider of foreign currency would be gotten rid of, too.

Well, look, if you shut down the drug industry in Mexico you'd get almost a rigor mortis. I mean, this is the lubricant. And it's not just Mexico. There are serious articles you can find that during the global financial collapse of 2008 what kept the global banks going was drug money. And the reason the drug money mattered is it's all cash. It was the only liquid source left as the system globally was collapsing. So, there's serious studies that think it was the essential lubricant to keep the system of banking - international banking - staggering along.

Now the fact is nobody knows the scale of the drug industry. And nobody ever will because there's no accurate accounting systems of it. We just know it's big and getting bigger. One of the fantasies is, almost every year, the United States government releases a study saying that drug consumption's going down in the US, but every year the budget to fight drugs increases. Every year, the size of the seizures increases. So, you have to ask yourself, "Why are the Mexicans smuggling heroin, cocaine and marijuana into the United States - and methamphetamines - if increasingly nobody uses it here?" Well, the answer is the government's lied. They're not doing this for aerobic exercise, the drugs are being brought into the United States just like any other product - because people here buy them. One of the fallacies - you know, the idiocies of the war on drugs, is that there's never been a successful government measure that can repeal the market economy. You know, that's why prohibition failed.

Regarding the decision to deploy the Mexican army against the cartels, you once said: "[President Felipe Calderón] ripped the mask off Mexico ... And the mask he ripped off revealed what's really going on in Mexico: mass poverty and social disintegration. Now it's turned into a war by the Mexican government against the Mexican people." Why should the government's actions be perceived as a war against its own people?

Well, I'll tell you why: Because Mexico is an Indian nation that's traditionally been ruled by Europeans. The presidents of Mexico tend to look like Germans and the voters tend to look like a mahogany table. And the elites there always resented this, always wished they didn't have an Indian nation to rule. And this has been going on a long time. Porfirio Díaz tried to slaughter all the Indians, for example, during his 30-ear dictatorship, even though he was an Indian. So, it is not odd at all for a president of Mexico to attack his own population.

Now Calderón is a very devout Catholic and he believes deeply in free trade. He belongs to a party there that would be like the Republican Party here. So, he thinks he's giving shock therapy essentially to his own nation. One. Two: I don't think he had any idea really what he was getting into. He thought he'd prove he was a powerful strongman, and the country exploded because he didn't know his own country. What I mean when I say "ripped the mask off" is that he had assumptions about Mexico that were not true. And now the real Mexico's there - a country full of poor people with a corrupt government and there's - in a way a lot of the violence is like a mass revolt in the country. It's not political; it's simply, look, there's not a future for a lot of people; there's no money; there's no jobs. And now they're just killing each other and robbing. That's a lot of the crime - it has nothing to do with cartels fighting [each other] ...

Calderón put the Army on the street and you've been a strong critic of this. Why are you opposed to the deployment of the military? And do you think if Calderón disengaged the military it would have a significant positive effect?

Let's take the first part of the question. I'm critical of using the military because it's always been corrupt and doesn't know how to police anyway - armies only know how to destroy targets. The Mexican military has always been in the drug business. It's just a bunch of nonsense to say they're not corrupt. In the early '80s, Rancho Buffalo, which was a huge marijuana plantation, had 10,000 campesinos as field hands and it was run by the Mexican Army. The generals were there all the time. So the premise that they're not corrupt is idiocy.

The second thing - what has happened now with 40,000 dead Mexicans, with 17 states at least in Mexico out of 30 full of extreme violence, is you can't unring the bell. If the Mexican Army goes back to its barracks, this violence will continue. Good God, you can't produce 8,000 slaughtered people in one city like Juarez and not have a bunch of people permanently damaged just because they become killing machines. You know, this thing has gotten too big. You can't stop it now easily. What the Army is doing is realizing this failure. The Army is trying to get a lot of the duties turned over to the federal police because they don't want to do it anymore. Because it isn't working; it's a disaster and armies are always about protecting themselves, you know.

But Mexico's gone down a path now that cannot easily be changed. Calderón's administration will end in a year, in 2012. The next president is going to inherit a mess. And if he sends the Army back to the barracks and announces a new policy, I don't think it will end the violence. There are too many people in the country now living as outlaws. We know this from our own experience. When we ended prohibition in '33, it didn't end - the gangsters didn't say, "Ah, hell, I can't be a bootlegger anymore, I guess I'll go get a job at JC Penny's." They remained criminals. And basically, part of the '30s was exterminating a national criminal class created by prohibition. The same thing's going to happen in Mexico.

The United States has financed much of the Mexican state's involvement in the drug war through the Mérida Initiative. Could you explain how this plan works and outline US involvement with the Mexican military and law enforcement?

Well, the Mérida plan doesn't work. It was an initiative started under President Bush to say, "Well, if you help us in the drug war, we'll give you half a billion a year," which we are. Actually, the Mérida plan is increasing and now the US government has just announced out of good heart we're going to expand it and give 300 million a year to murderous regimes in Central America to fight drugs. But the problem is, we're arming a bunch of entities in these countries that slaughter people; it's not going to affect the drug business, because the drug business is where the money is. This is a fantasy to sell [to] the American voter, that we're dealing with the problem. The people in favor of this policy know it isn't true and functionally they're liars. Hillary Clinton and these people are just lying, because Hillary Clinton is a highly intelligent person. She knows better than this. She just knows it's politically palatable.

Look, there's just no solution to what we call the "drug problem." Our policies are at best idiotic. Americans want to consume drugs; nobody's going to stop them. So, any effort to continue this policy to solve what we call a "drug problem" - drug consumption - through making it criminal, will fail. It's failed for 40 years. We're 40 years into this official war; we've spent a trillion dollars and drugs are more available than when we started and they're, in real dollars, cheaper. Yeah, so, there's no defense of this policy ...

You make the case that not only much of Mexico's economy, but also much of the US economy is rooted in the drug war through the prison industry, countless thousands of jobs in law enforcement fighting drugs etc.

Here's the deal: It's not that the war on drugs is essential to the economy; it's that it's a vested part of our culture now. It has a constituency; it lobbies; it has a life of its own. If you come out, as I do, for legalization [of drugs], there are billions of dollars readied against you. When George Soros bankrolled medical marijuana, the initiative in California, the largest single source of money to fight that initiative was the prison guards' union here. That's where, I guess, where it's part of the economy. Most Americans - what's changed since I've covered this is, 30 years ago, people tended to see drugs as something that was used by lower-class people who were losers, that didn't have a lot to do with their life. Now, there's hardly a family in this country that hasn't had a member in it damaged by this war on drugs, that hasn't had a member of their family that's an addict and suddenly is treated as a criminal. I do talk radio shows fairly frequently all over this country and I never bring up legalization. Invariably, a caller does and they always do it for a personal reason. Their uncle, their cousin, their sister, their brother, you know, has a problem with drugs and they think it should be treated as a health issue, not a criminal issue, because it's no longer the darkness at the edge of town ...

As you've mentioned, remittances from Mexican workers living in the US is one of the greatest sources of income for Mexico. You've previously expressed the view that, given the state of Mexico's economy, it's therefore in the government's best interest to encourage emigration to the US - that a Mexican is in many ways a liability to the state if they stay, but a source of financial revenue if they leave.

Look, what we call "illegal immigration" is actually a policy favored by the Mexican government to exile its own citizens. Fifty percent of the Mexican population lives outside the economy in real poverty - deep poverty. You take one of those people, let's say an Indian from Oaxaca; he illegally goes north; he makes it to Chicago; he's washing dishes. You suddenly transferred a person, as if by magic, from somebody who can't even sustain himself in Mexico to somebody who's sending home to Mexico hundreds of dollars a month. He turns into a human ATM. Well, this has happened to millions of people as they've left Mexico. I believe the most successful anti-poverty initiative in the history of the world is the migration of the Mexican poor north. We've probably taken ten or fifteen million people and turned them into little bankrolls sending money home. They're sending home over 20 billion a year; they're sustaining huge numbers of people in Mexico and all that had to be done to achieve this miracle is let them go through a wire and take a menial job in the United States.

So, in your opinion, the Mexican "emigration" policy, I guess, and the US immigration policy, where do those collide and where do they complement each other?

They don't collide. Look, the Mexican policy is that "Mexicans have a right to move freely." What's real policy is, "Let's get rid of these worthless people that are taking up space here and then they go to the United States and they send money home." The US policy is, "Oh, this is terrible." When, in fact, we have sectors of our economy dependent on these people ...

One of the arguments I like to make, too, especially to progressive people, is that the most successful NGO in Mexico is the drug business. It employs more people; it pays higher wages; it doesn't discriminate. It's one of the few places in the country that's on a merit system. Now, you know, that's why it's run by cutthroats from poor families, in general. Mexico has a caste system, but in the drug world, it's all on how well you do your job. And so, you can kill your way to success. It's the most successful nongovernmental organization in the history of the country. All the other NGOs are just little trifles in comparison. And that's why nobody can compete with the drug industry. I don't care how many people get killed moving drugs; there's a line to get the job.

I'm not sure if you've seen it, but British journalist Ed Vulliamy -

He's a friend of mine.

He's a friend of yours?

I know him, yeah. Look, there's only about seven people that give a damn about the border ...

He wrote an article on Juarez last week for The Guardian. He actually quoted you. But he said: "The thing that really makes Mexico's war a different war and of our time, is that it is about, in the end, nothing." He describes it as an "inevitable war of capitalism gone mad." Basically, he laments that the mass violence is purely market forces gone wrong and without rational cause, possessing neither ideology nor honor and fought for the latest T-shirt brand. What is your view on this?

Well, look, I know Ed ... We've had this argument for years. Ed comes from a sort of left perspective and he wants to see a sort of political meaning in things. And when I first met him, I told him that's where I disagreed with him, that there is no political meaning, in the sense he's thinking of, in the violence in Mexico today. There are no manifestos. These are not proto-insurgencies, like Mrs. Clinton alludes. This is simply about survival. It's about money and power. It doesn't have a politics.

But I think that's what he's arguing. He's saying -

No - he is now, yes. Look, I like to argue. And Ed's a very good reporter. And he would like to have this - there's some beginning of the Mexican Revolution in this, but there isn't. It's apolitical horror. It's just killing. And now, we have thousands and thousands and thousands of people inured to violence. Now, we have countless people damaged. Now, I have a friend, Pastor Jose Antonio Galván, who's a street minister in Juarez and he deals with the damaged. And he believes - and I think he's right - that for every killing there's 30 or 40 people damaged mentally by the murder. Because these are murders. This is not I go out across the street and get hit by a car. People get sad then, but they can - it's explicable. This is your wife gets in the car to go to the grocery and gets machine-gunned two blocks away and you have no idea why and you never find out who did it. That's what's happening. There's been at least three instances in the last couple months that I can recall of police finding little toddlers wandering the streets and then they finally figure out who they are and they go to the house and the parents have been slaughtered. The kids have just wandered off, you know, little tiny children.

In much of you're writing, the scale of the Mexican migration has been put into the larger context of a greater migration: the international mass movement of the poor toward concentrations of global wealth. Can you expand on this larger idea and where you see Mexico fitting in?

Yeah. Americans are obsessed with the illegal Mexican migration, because it's the only real taste they get of the actual goddamn world. The world is full of people moving now because of collapsing economies and growing populations. If you go to Europe, there's a flotilla now of ships across the Mediterranean to stop people from trying to get in ... This is happening all over the world. Our assumptions about a global economy and how it'll hum along - this sort of, let's say, Clintonian wet dream - are proven false. It isn't working out that way. China has at least 200 million dislocated people as it's tried to industrialize like the West. And so, we're going to have to live with this ... And I think, in that sense, the stresses will increase.

Our solution is infantile. We've built this actual physical wall. Years ago and I still am, a deep fan of Garret Hardin. Garret Hardin was a kind of philosopher and he wrote two key essays - "The Tragedy of the Commons," [and] he also wrote one called "Lifeboat Ethics" - saying we were headed toward barbarism - he wrote this in the 1970s - that as resources decline, population increased, we would get a lifeboat situation with people swimming to your lifeboat and you wouldn't let them in, because if you do, the whole boat sinks. In other words, we'd have to make terribly harsh decisions. Well, I think even that's out of date now, because there's no lifeboat ethics with global warming etc. There is no lifeboat. We're all trapped together now - that no matter what I do or anyone else does, that if China wants to keep increasing its carbon footprint, we're going to have planetary disaster. And you can't build a wall against that. Really. We're living in the past with those concepts.

What we haven't got yet, is a political class on the planet that can sell the idea of global catastrophe. We're still pretending we can wall it off, you know ... Let me make this clear: it doesn't matter if you like Mexicans or dislike Mexicans. It doesn't matter if you want them to stay in their country or want them to come here. They're not going to stay in their country. They're not going to stay there and die. There's going to be 150 million of them in 30, 40 years. The country can't sustain its current population of 110 million, so they are going to move. I don't get to decide that. I just have to live with that reality. Europe is going to be under siege. The rich nations of the world are going to be under siege, because people will try to escape into them to save their own lives.

At least in the Mexican instance, what do you believe should be done? What are the steps that need to be taken to, at the very least, restore some normalcy to the lives of those in Mexico?

Mexicans have to fix Mexico. Americans can't. But what Americans can do is stop policies that damage Mexico and make everything worse. Renegotiate NAFTA so it pays a living wage. Face the fact that we're going to have Mexican workers here and legalize them either as temporary workers or as people eligible for citizenship. We cannot run a country with a secret underclass. We cannot run a country where there's two types of human beings. We did it once; it caused a civil war, killed 600,000 people and set back an entire region of our country - the South - for a century. Finally, end the war on drugs. There's no solution, for Mexico or the United States, by giving tens of billions of dollars a year to a criminal class. We can't stop people from using drugs. We let them have drugs and make it a medical issue. You know, just as we have with smoking, alcohol etc.

You know, we can live with drugs. We already are, they're everywhere anyway. One of the preposterous claims people make is, "Well, Chuck, if you legalize drugs they'll be in the schools." Well, Jesus, go down to the schoolyard, I mean they've been there for decades and everybody knows it. What we don't want is an unregulated use of them. And we don't want people dying from overdoses because of toxicity and bad drugs. I would like to live in a world where there are no guns and everybody lived on organic vegetables, I guess, but I don't get that choice. I get a choice of this world and, in this world, making drugs criminal has been a disaster. And any intelligent person when they see something doesn't work tries something else. Nobody throws sand in their gas tank, has the engine stop and says, "Well, I'll just keep throwing sand in." Well, that's what we're doing. You have to be on drugs to be in favor of the war on drugs. You can't be clean and actually think it's working.